Applicability of the Airline Deregulation Act to State Workers' Compensation Programs

Floor Speech

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Mr. GOODEN of Texas. Mr. Speaker, I rise today to discuss an important issue to both our nation's employers and their employees; and that is regarding the applicability of the Airline Deregulation Act (ADA) to State Workers' Compensation programs. When Congress enacted the ADA in 1978, one of the main goals was to place maximum reliance on competitive market forces to help lower prices and improve efficiency, innovation, variety, and competition in the delivery of air transportation services.

But the ADA was never intended to prohibit states from regulating workers' compensation systems.

In my home state of Texas, there has been litigation on this issue for over a decade, and there is no end in sight. That is why Congress needs to step in and why I filed Amendment 300 to H.R. 3935, the Securing Growth and Robust Leadership in American Aviation Act.

My amendment, which unfortunately was not able to be made in order as part of the House's consideration of H.R. 3935, would have amended the Airline Deregulation Act to clarify that the original intent of the ADA was not to preempt state workers' compensation laws with respect to billing and payments for air ambulance services.

The foundation of the state workers' compensation system is individual state regulation of reimbursement amounts under their workers' compensation medical fee schedules, thereby creating cost transparency. In most states, this is accomplished by setting workers' compensation medical fee services at a percentage above what providers receive under Medicare.

As a result, workers' compensation coverage is widely available to employers of every size across all industries; and ensures employees are protected from the economic impact of workplace injuries.

Unfortunately, the protections and certainty this system affords both employers and workers alike started to be undermined in 2010 when numerous air ambulance service providers began asserting the ADA preempts state workers' compensation medical fee schedules, creating a pathway for air ambulance fees to unreasonably skyrocket.

The preemption of state workers' compensation laws within the ADA is a pure accident. When Congress passed the ADA in 1978 to deregulate the airline industry, it certainly did not intend to deregulate workers' compensation insurance payments to air ambulance companies.

As part of the 2018 FAA Reauthorization Act, Congress established the Air Ambulance and Patient Billing Advisory Committee at the Department of Transportation to address several issues involving air ambulance companies, including medical fees, consumer choice, and protecting consumers from balance billing. In March 2022, the Advisory Committee submitted its report to Congress, which included a recommendation to amend the ADA to clarify that it does not preempt state laws relating to state regulation of workers' compensation insurance programs.

My proposed amendment to H.R. 3935 embodies the Advisory Committee's recommendation and will address the accidental preemption of state workers' compensation laws and the inadvertent federalization of a part of state workers' compensation systems. This simple clarification that the ADA preemption provision does not apply to state workers' compensation payments for air ambulance services will return the issue to the states where it belongs, and air ambulance companies will have every opportunity to make their arguments on the appropriate payment amounts for their services within each state's workers' compensation system.

Unfortunately, my amendment was not included in the bill that was considered by the House, but I will continue to work with other members on legislation to address this important issue.

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